How to Sell an Online Business
Building a successful online business is never an easy task. It is a venture that requires skills, time, energy and sacrifice. Once the tough formative years are gone, you get to enjoy the traffic and the profits that come with it. Over time you get attached to your clients, employees and the operations. So attached are you that even if you want to move on to other ventures, you find it hard to let go. Well, whether or not you are open to selling your online business at the moment, this is a simple guide on how to go about it once you are ready.
Prepare Your Business for Sale
Yes, there are several things you need to do to make your online business ready for sale in today’s online marketplace. Some of the most basic information you need to prepare to include accurate business data, effective systems and easy – to – understand finances. When this information is accurate, updated and readily available, it helps boost the asking price.
Ideally, you should have this information from the start of the business. However, if you have slacked in one way or another, you can still update your business information before putting it up for sale. Going through this preparation stage exposes you to vital information as listed below.
• Ensures that your business data is solid and accurately shows the business’ performance
• Helps you to streamline operations, systems and processes for better profitability
• Helps point out business weaknesses and remedial actions
• Helps prepare your business for scalability through process automation
One of the most important questions investors ask is whether or not the business will be profitable. No one wants to spend money on something that will be a liability, investors require the full recovery of their investment. It is therefore very important that you are able to demonstrate that your business processes are effective and profitable through accurate supporting data and analytics. Early preparation dramatically increases your chances of selling your business at a profit.
Let’s Talk Business Data and Analytics
One of the vital vetting points for an online business is traffic. How much traffic does the website get and where is this traffic from? This is important in assessing the current position as well as the future performance of the business. A tool such as Google Analytics can come in handy.
Keeping in mind that traffic is the bloodline of online businesses. As such, any serious buyer will want to see real numbers as opposed to filling up spreadsheets. The buyer will also be keen to verify that the traffic is genuine leads as opposed to spam traffic from questionable sites.
Getting the Numbers Right and Keeping the Books Straight
Business analytics go hand in hand with finances. How does your business account look like? It is important that you keep your books straight and present the information in a clear, easy to understand format. It is very important to have your business and personal accounts separated. Trying to vet a business whose accounts are jumbled up with personal transactions can be a nightmare.
Apart from traffic analytics, buyers will use business accounts to assess the value of the business as well as get proof of revenue. It is vital to prove to a buyer that the business is indeed profitable as well as give an overview of the costs of operation. The books also show any liabilities as well as the business’ relationship with its suppliers. It is also important to give the buyer access to a record of updated tax reports. Look through business exchange marketplace for sellers to familiarize yourself with what is required when selling.
Let’s Talk Business SOPs
Standard operating procedures are the manual that runs the business. SOPs show how product listings, content creation and marketing, search optimization and all other business operations should be handled. SOPs also guide on remedial actions in case of business operational threats such as risks of SEO failure.
Many business buyers are looking for a well-oiled money-making machine. This means that if the systems are not seamless, they may shy away. Additionally, if the business depends too much on the presence of the owner to function, they may see that as a liability. The purpose of SOP is to ensure that there are systems set in place to run the business without constant supervision from the owner. Once you prove that there is an opportunity for growth of your already seamless business, you are sure to get a good deal.
The SEO Cleanup
Search engine optimization can be a complicated subject. However, since it is the lifeline of the online business, it is vital to have your site well optimized when planning on making a sale. Look out for duplicate content, harmful and broken links and plan for a link clean up if need be. Ascertain that all pages and product descriptions are optimized accordingly. Remember that SEO is a big part of organic traffic.Â
Is There a Right Time to Sell?
What do you expect to gain from the sale? Well, your reason for selling your business will dictate the right time to make a sale. A business valuation should be carried out, especially if you want to sell the venture at a profitable price. You can hire the services of professional business broker or seller to help with the valuation if you are not certain that you can handle it. You can choose to sell the business on your own or through a third party.Â
